Shares of Hertz Global Holdings Inc. (HTZ) shot up 20% in active trading Wednesday, putting them on track to snap a 4-day losing streak in which they plunged 38%, after Jefferies analyst Hamzah Mazari said his checks suggest that CarMax Inc. (KMX) and AutoNation Inc. (AN) could be interested in the bankrupt car rental company. Trading volume was 18.8 million shares, making the stock the most actively traded on the NYSE. Meanwhile, CarMax's stock gained 0.3% while AutoNation shares fell 2.3%. Mazari said the most obvious way for auto dealers CarMax and AutoNation to "swoop in" would be to bid for 150,000 of Hertz's used cars, which are likely to be sold to pay off lenders, but also as Hertz looks to reduce its fleet given current demand and need to shore up cash. He believes a sale of 150,000 used cars could raise $3 billion. Separately, Mazari said he believes the $1 billion in liquidity Hertz had as of March 31 will have dwindled to about $365 million by June 30, which means the company needs debtor-in-possession financing of at least $900 million. "We think the longer [Hertz] takes to re-emerge from bankruptcy with a cleaner capital structure, the more opportunity there is for rivals to pick up share," Mazari wrote in a note to clients. Rival Avis Budget Group Inc.'s stock (CAR) fell 4.5% in morning trading.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
June 24, 2020 09:49 ET (13:49 GMT)
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